Cantor Fitzgerald Reiterates Overweight Rating on Micron

Cantor Fitzgerald analyst C.J.

Muse reiterated an Overweight rating and $700.00 price target on Micron Technology (NASDAQ: MU).

“Overall, management’s key focus was on the expected sustainable AI-led demand for memory, the secular and durable nature of the business, how high value-add memory roadmaps only augment AI capabilities, and how this backdrop is driving structural changes to Micron’s customer supply relationships.

On the other hand, with shares trading <3.5x expected EPS of at least $100 by CY27, the market seems dubious about these changes.

We note concerns highlighted of late include declining DRAM spot pricing (<5% of the market; mostly DDR4 in our view and inconsequential), fears of over-shipments to OAI (these were simply LOIs, minimal products actually shipped; there is no excess inventory in the channel here), and Google’s TurboQuant (compression algos are par for the course, nothing new and definitely not a change statement, in our view, and requirement to deliver cost savings to support Jevons Paradox).

Thus, the coming Qs will likely be a tug-of-war with Micron’s fundamentals moving higher, balanced by worries about the sustainability of AI investments.

As for us, we continue to believe in an elongated cycle, where Leading Edge Wafers/CoWoS, growing HBM trade ratio, lack of clean room space, and soon shortages of Semi Equipment will support a multi-year upcycle.

Thus, no change to our view – Micron remains a TOP PICK.”

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